The New Business Model, On The Road To Holacracy

The New Business Model, On The Road To Holacracy

Les Echos

The main goal of holacracy is to recreate potential conditions for promoting employee engagement. Only 14% of European employees say they are engaged in their company, while the vast majority (66%) are disengaged.

Only 14% of European employees say they are engaged in their company, while the vast majority (66%) is disengaged. This is the result of a Gallup poll conducted last August. The reversal of this trend, in a service-based economy, is a crucial issue for our growth. However, it’s clear that business structures are still very strongly characterized by the Taylorist model of the previous century.

Whereas in the previous century businesses shaped their environment, today it’s the environment, technologies, and the high-speed generation of competition that shape businesses: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change” (Darwin).

Each developmental stage of businesses can be thought of as corresponding to a specific awareness, vision of the world, and social organization. Our vision of the world and our organization, influenced by the new connected generations, have been transformed by the emergence of new technologies.

Digital dematerialization is in the process of revolutionizing our relationships with public institutions and democracy. It has already modified the nature of our interpersonal relations and initiated the true digital existence of individuals. The emergence of these new communication capacities engenders a gradual “despacialization” of the workplace. The need for worker mobility emerges at the same time as the unchanging desire to belong to a group.

As a cause or a consequence, hierarchical relationships are slowly fading away, as is the very notion of work. The shift toward a service-based economy involves the collaboration of workers whose tasks are often of an unpredictable and uncontrollable nature. This new vision of the world and of social relations is not reflected in hierarchical and patriarchal structures inherited from the industrial era.

Holacracy is part of the answer to these new challenges. Etymologically, holacracy means power (kratos) of the totality (holos). Concretely, it is a business model that means entrusting power not to everyone but to organization itself, which is considered as a living being. The objective of holacracy is to develop the collective intelligence of the group and its potential for innovation and creativity, by freeing the members from their fears and breaking them out of a rigid hierarchical system.

Concretely, the pyramid structure gives way to an organization of concentric circles. Instead of complying with a logic based on positions and status, individuals are tasked with one or more missions with dedicated budgets and visible short-term results.

The function of management is profoundly modified by this new organization. The hierarchical principle in itself is not contested; this is what clearly differentiates holacracy from anarchy. Leadership and vision remain an absolute requirement. However, the function of the intermediary manager as we know it today is readapted.

It is broken down into two separate roles, present within the framework of each circle: the function of representation, defending one’s teams before the superior circle; and the function of leadership, for the purpose of obtaining the results expected by superiors.

This fragmentation is intended to put an end to the “dual personality” of managers. Moreover, those who take on each role also fill other roles. The new managers are also doers who are no longer only responsible for supervision but also for production.

This manner of organization should enable the company to be constantly on the lookout for its adaptive advantage. In holacracy, anything may be reconsidered at any time, and the organization can change rapidly through the redefinition of everyone’s roles.

Navigating objectives is dynamic and agile. Whereas the structure inherited from the first industrial era was fragmented and unconscious, and even obstructed interdependence, holacracy gives rise to a coherent, integrated eco-organism that adapts in real time.

Consensus then means the consent of each of the associates, who are actual stakeholders in the company’s activity. Holacratic business is multifaceted. It “shapeshifts” to modify its impact on the world through the sum of small iterative decisions made within each of the groups of associates.

The holacratic trajectory is a cultural and organizational journey that takes time. Companies that were recently created on the digital economy model have an easier time orienting themselves toward this type of organization than those that emerged from an industrial model inherited from the twentieth century.

Nevertheless, the holacratic model still leaves room for reflection. How can innovation be encouraged without some amount of individualism?

In fact, innovation is still tapped by individuals, and it is motivated the desire for the common good, but also by the desire for recognition or wealth. This individualism is the lightning rod of innovation. The difficulty for a business lies in the dialectics between the group and the individual. “Intrapreneurship” thinking is moving towards this requirement, by allowing the business itself to be the receptacle of innovation and of individual or collective initiative.

Finally, in a polymorphous business whose objectives change on a regular basis, how can the employees and their managers be reassured? In the company of the future, reassurance will no longer come exclusively from the leader or from middle management.

It will come from managers and peers, but also from outside the company and from the communities of experts to which the associates contribute. The main goal of holacracy is to recreate potential conditions for promoting employee engagement.

The New Business Model, On The Road To Holacracy was last modified: May 19th, 2015 by DavidLayani